The Cambodian Shoe Industry Chamber of Commerce issued a notice on the 4th saying that due to the impact of the new coronavirus epidemic, buyers in the European and American markets have successively canceled orders in large numbers, resulting in the Cambodian shoe industry being Face huge challenges.
Cambodia’s shoe industry is experiencing a “cold winter”
According to the notice, according to the Chamber of Commerce’s instructions to members of the Chamber of Commerce on March 30 According to the survey, among the approximately 127,000 workers employed in the industry in April, approximately 57% of the 72,000 workers were able to go to work normally, 25% of the workers faced suspension of work, and 12% of the workers faced a complete suspension of work. Another 6% of factories are unable to confirm whether the order status can be smoothly arranged for production.
The situation was even more severe in May. Only 11% of workers could go to work normally, and most of them were about 60% Factories are unable to confirm order status, and orders from June to later months are even more unclear, which will severely impact the overall employment population and industrial economy.
It said that here, the Cambodian Footwear Chamber of Commerce only appeals to buyers on behalf of its members. Now that the order has been confirmed, the payment period has been shortened, and the completed order can be paid to the factory as soon as possible, so that The factory can have enough funds to weather this crisis.
The Cambodian Footwear Chamber of Commerce hopes to get assistance from the Cambodian government. During the material shortage period in January and February, the factory still has orders. The government calls on the factory to subsidize workers’ basic salary of 40 when the factory is shut down due to material problems. %. But in this moment of crisis, the factory is facing no orders, no income and capital flow to continue to subsidize workers for a long time. Continued subsidies will put the factory into a greater crisis.
“We plead with the government to provide financial assistance, subsidize workers and factories at the same time, or grant special loans to enterprises so that they can have capital flow to maintain operations.”
The notice stated that if the subsequent situation does not improve and orders are unclear, the factory will face a long-term shutdown or even be closed and unable to operate. We thank all employees for understanding the current difficulties, and we hope that the government can lead the entire industry and workers to tide over the crisis together.
91 garment factories plan to apply for suspension On April 2, the Ministry of Labor pointed out to reporters that due to reduced demand in the export market, a total of 91 factories have applied for suspension so far, with 61,500 workers. Affected.
Monica Jiang, deputy secretariat of the Garment Manufacturers Association of Cambodia (GMAC), said that foreign markets are facing difficulties due to the impact of the new coronavirus pneumonia epidemic. At the same time, about 70% of Cambodia’s clothing products exported to the EU and US markets are also affected. He said that most factories in Cambodia have applied to suspend operations because buyers from the European Union, the United States and Canada are also affected by the new crown pneumonia epidemic.
“Buyers told us to suspend the supply of products and keep the produced products in the factories. Garment factories in Myanmar, Bangladesh, Vietnam, Indonesia, and Laos are also facing the same problem.”
He said, If we evaluate the market share of exports, the EU accounts for about 46% of total exports, the United States about 28%, and Canada about 8%. The total has exceeded 70%. Therefore, we are also greatly affected, and some factories will apply for shutdown in April.
Cambodia’s garment industry has been severely affected
Recently, Cambodia’s garment industry has been severely affected, causing many clothing brands to It began to violate the contract by canceling previously placed orders and reducing the forecast quantity of materials, causing garment factories and auxiliary material suppliers to face order cancellation dilemmas and semi-finished product cost problems. What’s even worse is that some buyers refuse to accept goods that have already been produced, and goods that are being produced also ask to stop production. This means that the factory immediately has no income. There is no ability to pay workers. Therefore, Cambodian garment manufacturers will call on buyers to receive the goods and pay in accordance with the contract.
The Garment Manufacturers Association of Cambodia (GMAC) stated in an open letter to all Cambodian textile buyers that the new coronavirus Covid 19 has brought chaos to our lives and businesses. Therefore, GMAC calls on all buyers of textiles from Cambodia to work together to tide over the difficulties together.
“All parties in the global apparel supply chain are feeling the heavy burden caused by COVID-19. However, compared to our customers (buyers), factories operate on slim margins and bear The ability to bear this burden is much weaker. The burden of survival faced by our workers is huge and important. We call on companies to abide by the terms of the procurement contract and fulfill your obligations by picking up goods on time and paying for the goods that have been produced and the goods currently being produced. This will allow us to continue to provide jobs for our 750,000 workers and give us the ability to continue paying workers to ensure the livelihoods of millions of Cambodians.”
“We ask all buyers to take corporate and social responsibility towards your suppliers and all workers in our factories. Let us work together and believe that together we can overcome this pandemic and Protect the livelihoods of workers and their families and ensure the survival of enterprises.”
The garment production industry is Cambodia’s largest industry, generating US$7 billion in revenue for the Cambodian economy every year.
Cambodia benefits from Europe��’s “Duty Free for All Goods Except Arms” trade plan, which aims to promote the economic development of developing countries around the world, allows Cambodia to export most goods to the EU without paying tariffs. In 2017, Cambodia’s exports to the EU totaled 5 billion euros. In 2016, EU countries accounted for about 40% of Cambodia’s export market. Cambodia’s main export products are clothing, and about 700,000 people in the country are employed by clothing companies.
In September 2018, the United Nations Human Rights Council investigation team issued a report accusing the Burmese army of launching genocide against the Rohingya minority. Therefore, the EU is considering revoking the preferential trade treatment granted to Cambodia on the grounds of serious human rights violations. The EU will make a final decision on Wednesday.
International clothing and footwear brands such as Adidas, PUMA and Levi Strauss have written to Cambodian leader Hun Sen, saying the country is struggling with labor and human rights issues may lead the EU to withdraw trade preferences for the apparel industry.
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